International debt results from a protracted imbalance in capital flows-a state borrowing more than it lends-to cover a chronic trade deficit or government budget deficit.

Question

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International debt typically results from a country borrowing more than it lends, often to cover a chronic trade deficit or government budget deficit. This creates a long-term imbalance in capital flows, with more money flowing out of the country than coming in.

International Debt Results from a Protracted Imbalance in Capital Flows-A